Bermuda-based DHT Holdings has purchased BW Group's entire fleet of 11 very large crude carriers (VLCCs) for $538m.
The 11 VLCCs includes two newbuild vessels that are expected to be delivered next year.
DHT will issue around $256m of its capital stock to finance the deal, while the company will also pay $177.36m in cash and assume around $104.16m in remaining obligations with respect to the two newbuilds to BW Group.
The cash requirements related with the latest deal are expected to be financed with bank debt.
Delivery of the VLCC fleet is scheduled during the second quarter of this year and is set to increase DHT’s total fleet to 30 VLCCs, which include four newbuildings for delivery next year, as well as two Aframaxes.
BW Group and its affiliates will also own around 33.5% of DHT's outstanding share capital after the delivery of the vessels and novation of newbuild contracts, and will be granted customary rights, including the right to appoint two directors to DHT's board.
DHT Holdings co-CEO Trygve Munthe said: “This is a great transaction for DHT and its shareholders. It is projected to be accretive to DHT's earnings and will deliver cost synergies by lowering G&A expenses per ship.
“Importantly, it will further improve our already competitive cash break even levels. We have identified this as a time to expand again and this acquisition signifies our ability to execute on our plans.
“The BW Group has a long history and a strong track record in the VLCC market, and they are aligned with our business model and strategy.”
The company also recently signed a deal to sell its oldest VLCC, DHT Ann, to an undisclosed entity for $24.8m.